20060110final_order_no_29947.pdf

Office of the Secretary
Service Date
January 10, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
VISTA CORPORATION FOR AN ORDER
AUTHORIZING THE OFFERING, ISSUANCE
AND SALE OF COMMON STOCK UNDER ITS
PERIODIC OFFERING PROGRAM AND ITS
LONG-TERM INCENTIVE PLAN
CASE NO. A VU-O5-
ORDER NO. 29947
On December 7, 2005, Avista Corporation (Avista) applied for authority to offer
issue and sell up to 7 000 000 shares of authorized but unissued Common Stock, without par
value ("Common Stock") under both the Company s Periodic Offering Program (2 000 000) and
its Long-Term Incentive Plan (5 000 000). The proceeds will be used for one or more of the
following purposes: ( a) the acquisition of property, or the construction, completion, extension, or
improvement of its facilities, (b) the improvement or maintenance of service, ( c) the discharge or
refunding of its obligations, (d) the reimbursement of moneys actually expended from income or
from the treasury of A vista to the extent permitted, or ( e) for other purposes permitted by law.
THE APPLICATION
A vista proposes that the 2 000 000 Common Stock issued and sold under the
Periodic Offering Program will be subject to the following pricing limitations: the price received
by Avista before agent commission, will not be less than $0.25 below the last price at which
A vista Common Stock was reported in the record of composite quotations published in the Wall
Street Journal on the trading day immediately preceding the day for the fixing of such price, and
will also not be less than 100% of the book value per share of A vista s Common Stock as of the
last day ofthe most recently ended calendar year.
Avista proposes to issue up to 5 000 000 shares of Common Stock under its Long-
Term Incentive Plan ("LTIP"). Avista has issued awards under the LTIP and is currently using
open market purchases to fulfill its obligations under the L TIP. A vista would also like the
flexibility to issue authorized but unissued shares of Common Stock to more effectively improve
the common equity ratio of its capital structure and reduce costs associated with issuing stock
through underwritings.
ORDER NO. 29947
STAFF REVIEW
Staff recommended approval of Avista Application.However, Staff also
recommended that A vista be required to file a status report with the Commission reflecting
pertinent quarterly financial information to include the following: (a) Debt to Equity Ratio, (b)
Enterprise Value, (c) Net Income Available to Common Stock, and (d) Common Shares
Outstanding. Staff proposed to work with A vista on an acceptable format to meet these
recommended filings.
FINDINGS OF FACT
Avista was incorporated under Washington law on March 15, 1889. The Company is
qualified to do business within the State of Idaho and is engaged principally in the generation
purchase, transmission, distribution and sale of electric energy to residential, commercial and
industrial customers in eastern Washington and northern Idaho, and the purchase, distribution
and sale of natural gas to residential, commercial and industrial customers in eastern
Washington, northern Idaho and central and southwest Oregon.
Based on the representations in the Application, we find that the proceeds from the
issuances and sales of the Shares will be used for (a) the acquisition Qf property, or the
construction, completion, extension, or improvement of its facilities, (b) the improvement or
maintenance of service, (c) the discharge or refunding of its obligations, (d) the reimbursement
of moneys actually expended from income or from the treasury of A vista to the extent permitted
or (e) for other purposes permitted by law.
Based on the representations in the Application, we further find that A vista proposes
to issue and sell 2 000 000 shares of its Common Stock under its Periodic Offering Program
subject to the following pricing limitations: the price received by A vista before agent
commission, will not be less than $0.25 below the last price at which A vista Common Stock was
reported in the record of composite quotations published in the Wall Street Journal on the trading
day immediately preceding the day for the fixing of such price, and will also not be less than
100% of the book value per share of Avista s Common Stock as of the last day of the most
recently ended calendar year. We also find that Avista proposes to issue and sell 5 000 000
shares of Common Stock under its Long-Term Incentive Program.
No person has received or will receive from A vista any fee (1) for services in
connection with the issuance or sale of the above-referenced Common Stock, other than fees for
ORDER NO. 29947
legal, accounting or similar professional or technical services, or (2) for services in securing
underwriters, sellers or purchasers of the Common Stock.
The Company has paid the required fees required by Idaho Code 9 61-905.
CONCLUSIONS OF LAW
Avista is an electric corporation within the definition of Idaho Code 9 61-119 , a gas
corporation within the definition of Idaho Code 9 61-117, and a public utility within the
definition of Idaho Code 9 61-129. The Idaho Public Utilities Commission has jurisdiction over
this matter pursuant to Title 61 , Idaho Code, Chapters 1 and 9, specifically Idaho Code 99 61-
119 61-129 61-901 , and 61-902, and IDAPA 31.01.01.141-.150.
After examining the Application and Staffs comments, the Commission finds that an
evidentiary hearing in this matter is not required and would serve no public purpose.
The Commission further finds that the Application requesting authority to issue and
sell, from time to time and for cash, up to 2 000 000 shares of Common Stock under the
Company s Periodic Offering Program subject to certain conditions is for a lawful purpose, is
within A vista s corporate powers, and is generally compatible with the public interest. The
Commission further finds that the method of issuance is proper.
The Commission further finds that the Application requesting authority to issue and
sell, from time to time and for cash, up to 5 000 000 shares of Common Stock under the
Company s Long-Term Incentive Program is for a lawful purpose, is within Avista s corporate
powers, and is generally compatible with the public interest. The Commission further finds that
the method of issuance is proper.
This general approval of the general purposes to which the proceeds will be put is
neither a finding of fact nor a conclusion of law that any particular program of the Company
which may be benefited by the approval of this Application has been considered or approved by
this Order, and this Order shall not be construed to that effect.
The issuance of this Order does not constitute agency determination/approval of the
type of financing or the related costs for ratemaking purposes, which determination the
Commission expressly reserves until the appropriate proceeding.
ORDER
IT IS HEREBY ORDERED that the Application of Avista Corporation requesting
authority to issue and sell, from time to time and for cash, up to 2 000 000 shares of Common
ORDER NO. 29947
Stock under the Company s Periodic Offering Program subject to the following pncmg
limitations: the price received by Avista before agent commission, will not be less than $0.25
below the last price at which A vista Common Stock was reported in the record of composite
quotations published in the Wall Street Journal on the trading day immediately preceding the day
for the fixing of such price, and will also not be less than 100% of the book value per share of
Avista s Common Stock as of the last day of the most recently ended calendar year, is hereby
granted.
IT IS FURTHER ORDERED that the Application of Avista Corporation requesting
authority to issue and sell, from time to time and for cash, up to 5 000 000 shares of Common
Stock under the Company s Long-Term Incentive Program is hereby granted.
IT IS FURTHER ORDERED that nothing in this Order or any act or deed performed
in connection with this Order shall be construed to obligate the State of Idaho to payor guarantee
in any manner whatsoever any security authorized, issued, assumed or guaranteed under the
provisions of this Order.
IT IS FURTHER ORDERED that this authorization is without prejudice to the
regulatory authority of this Commission with respect to rates, service, accounts, evaluation
estimates or determination of costs or any other matter which may come before the Commission
pursuant to its jurisdiction and authority as provided by law.
IT IS FURTHER ORDERED that Avista Corporation shall file the following as they
become available:
1. The "Report of Securities Issued" required by 18 C.R. 934.10.
2. Verified copies of any agreement entered into in connection with the
Company s sales and issuances ofthe Shares.
IT IS FURTHER ORDERED that the Company shall file a status report with the
Commission reflecting pertinent quarterly financial information to include the following: (a)
Debt to Equity Ratio, (b) Enterprise Value, (c) Net Income Available to Common Stock, and (d)
Common Shares Outstanding, and will work with the Staff on developing an acceptable format
to meet these filings.
IT IS FURTHER ORDERED that the issuance of this Order does not constitute
acceptance of Avista s exhibits or other material accompanying this Application for any purpose
other than the issuance of this Order.
ORDER NO. 29947
THIS IS A FINAL ORDER. Any person interested in the Order (or in issues decided
by this Order) may petition for reconsideration within twenty-one (21) days of the service date of
this Order with regard to any matter decided in this Order and in this case. Within seven (7) days
after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 99 61-626 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
/ ()-#--
day of January 2006.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
O:A VU-05-
ORDER NO. 29947